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Scottish Mortgage may top up dividends from capital next year

Scottish Mortgage delivered a return on NAV of 38.1% for the year to 31 March 2017, this compares well with a return on its benchmark of 33.1%. The return to shareholders was 40.9%.

The board is recommending an increased final dividend, providing a total distribution for the year of 3.00 pence per share (2015/16: 2.96p), an increase of just over 1%.  In order to achieve this, given the low level of income in the portfolio, it will be necessary to utilise most of the remaining revenue reserve which, once the final dividend is approved and paid, will stand at just over 0.5 pence per share. Shareholders have already granted the company the power to pay dividends from capital profits. In view of the explicit dividend growth component of the investment objective, the Board wishes to make clear to shareholders that it would be willing to make such distributions from capital profits, in order to sustain or modestly increase our dividend, provided that the Board is of the view that the total returns being earned by the company over the long run justify this.

There is no report from the investment manager in the announcement but this will, most probably, be in the annual report when this is published.

SMT : Scottish Mortgage may top up dividends from capital next year

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